Consultation Paper on Alternative Dispute Resolution - Law Reform ...

to follow the court‘s earlier suggestion to mediate the dispute. 48 As noted by
Carey
―The decision in Dunnett v. Railtrack clearly indicates that the courts
in England and Wales take ADR very seriously. The cost implications
flowing from a failure to engage in ADR, especially where proposed
by the court, may now be said to go somewhat further than merely
encouraging the parties to engage in it… The extent to which costs
may be apportioned contrary to conventional practice where ADR
has not been utilised add an element of compulsion, and the parties
and their lawyers must now very seriously consider availing of it, as is
clear from Brooke LJ's decision.‖ 49
11.51 The Commission does not necessarily concur with this view that
Dunnett has crossed the line into compulsion, but accepts that the line is quite
thin at this stage.
11.52 In Hurst v Leeming, 50 Lightman J provided substantive guidelines on
how and when a party could decline an offer to mediate without being
penalised. He stated that unacceptable reasons for declining mediation
included: the level of costs already incurred in the action; the fact that a claim
(as in that case) is for serious allegations of professional negligence and the
strength of the case. Lightman J stated that, even if a party has ―a watertight
case this is no justification for refusing mediation‖. Acceptable reasons (in this
instance) for refusing to mediate included the character of the party proposing
mediation.
48 A number of cases since Dunnett have taken a similar approach. In Etherton in
Malkins Nominees v Society Finance [2002] EWHC 1221 a 15% deduction in
recoverable costs was imposed for a failure by the winning claimant to take part
in mediation. In Neal v Jones Motors [2002] EWCA Civ 1730 the Court of Appeal
reduced the recovery of costs by £5,000 to reflect the impact of refusing to
mediate. By contrast in Boyd v Ministry of Defence [2003] ADR.L.R. 12/16 the
Court held that the case was clearly heading for a full trial in any case and thus
refused to impose a costs penalty for refusing to accept the late offer to mediate.
See also Royal Bank of Canada Trust Ltd v Secretary of State for Defence
[2003] EWHC 1479; Corenso Ltd v The Burnden Group plc [2003] EWHC 1805;
Leicester Circuits v Coates Brothers plc [2003] EWCA Civ 333; Allen v Jones
[2004] EWHC 1189; and McMillam Williams v Range [2004] EWCA Civ 294.
49 Carey ―Court Reforms, ADR and Costs Consequences — Lessons for Ireland?‖
(2002) 20 ILT 246.
50 [2001] EWHC 1051 (Ch).
340